Finance Committee on May 19th, 2020

[The Chair, Liberal, Wayne Easter]

Thanks, both of you.

We're turning to Ms. Koutrakis, who will be followed by Mr. Cumming.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

My question is for you, Mr. Greenspon. Even before the COVID-19 pandemic, traditional news media had experienced declining revenues, with many publications being seriously downsized or closing altogether. This has clearly affected the ability to carry out the informed journalism that is essential to the functioning of our democracy. I'm sure you will agree with that.

COVID-19 has accelerated the negative impact on the news media at a time when we need objective, fact-based journalism to keep citizens well informed. At the same time, some people use social media to spread disinformation. What actions or roles should the federal government take to address the spread of this disinformation around COVID-19 and other serious policy issues?

[Edward Greenspon]

Thank you for the question.

To start, we've just done a report on health and science disinformation, which we have not published yet but will publish, and we will have a webinar on June 11 on that question.

I don't think there's anything unique to these forms of disinformation. It doesn't matter whether you go through a public health door, a harm to democracy door, or a public safety door. You end up with the same issues, which come down to, I guess, the responsibility that platform companies should have or should not have for their content.

There are two arguments, two models. One is that they're a telephone company and nobody interferes with telephone calls or tries to regulate free speech. The other is that they are a publisher. I would subscribe to the second view, for sure. They do things that are similar to what an editor does, except that the algorithms do it rather than humans. They decide that you will see something different from what I will see, for instance. That's an intervention in the process that doesn't occur on the telephone.

When I was editor-in-chief at The Globe and Mail, the publisher, the proprietor and I were responsible legally for every image and every word that was in there—for defamation purposes, for hate speech, for obscenity and for whatever laws might be applicable. It seems not unreasonable to me that platform companies should have those same responsibilities for being legally responsible for what appears on their sites.

As well, of course, as I mentioned, we're seeing competition law trying to force them to pay for content they use. We'll see how successful that is. That's being attempted in Australia and France in various ways.

In “The Shattered Mirror”, our report that you're obviously familiar with, we suggested that, as in cable and television, as money moved from the producer to the distributor, there was a policy that came in to try to rebalance that. A 5% levy on revenues was placed on cable and satellite companies. That went into a fund to help pay for production. That seems to me to be a not unreasonable model to be exploring again.

I think there's a series of remedies, which we continue to explore, and which I would urge parliamentarians and governments to do as well, because, as you say, a society that.... Jim Balsillie said to me a couple of years ago that he felt the disinformation problem was even worse than the climate change problem, because you can't even have a debate on climate change if you don't have good information to start with. I think that's the base and the foundation of public debate and political discourse, and we need to clean up those pollutants.

[Annie Koutrakis, Liberal, Vimy, QC]

That's a great segue into my next question to you, Mr. Greenspon.

What role do you foresee the decarbonization of our oil and gas industry playing in Canada's economic recovery following COVID-19, and what investments do you think we should be making in the near future to ensure that we are taking the lead in lowering carbon?

[Edward Greenspon]

As I said in my comments, it's clear that there's an energy transition under way, and it's clear that energy transitions have historically taken many years to occur. It's going in a single direction, and I think government probably needs to accelerate that direction. I refer to the low sales of electric cars in Canada, for instance. The federal government introduced a subsidy for that last year, and I think it wants to push on that front.

In the meantime, if we're serious about meeting our targets and if demand still exists for oil, we will have to clean up that oil and we will have to form some sort of partnership. The balance sheets of those oil companies have been knocked for a loop over the last couple of months, and they will need some help.

The government has shown that it is going to impose conditionality through the LEEFF program that was referred to previously. I think oil and gas companies had better be prepared for that. In my discussions, certainly the larger ones and the ones that are a little more realistic about the future are preparing for that.

Then there are a series of investments. I don't want to be picking which technologies win or which technologies are best. I just talked about carbon capture, which seems to be an obvious thing. There is a lot of interest in hydrogen, a lot of interest in taking apart hydrocarbons and their hydrogen parts and their carbon parts. I think there's a lot of promise out there.

If we're going to export, we're going to have to export clean barrels of oil. If we don't want to destroy our balance of payments, we're going to have to export, so we're going to have to bring those things together.

[The Chair, Liberal, Wayne Easter]

Thank you for that.

Next is Mr. Cumming, followed by Mr. Fragiskatos.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you.

Thank you to all the witnesses for appearing today.

I want to focus my questions on Mr. Bloomer.

We previously witnessed the Governor of the Bank of Canada talking about the importance of the resource sector and energy sector, not only before COVID, but to participate in the recovery of Canada. We're certainly going to need it with the level of spending we have.

From your perspective and from the perspective of the people you represent, how important is this industry in helping Canada with its recovery and funding a lot of the programs you're hearing about today?

[Chris Bloomer]

Thank you for the question.

I can't underestimate how important the resource sector in general and the oil and gas industry in particular are going to be for driving an economic recovery for Canada. We need to think about the oil and gas industry in a broader way. We have an industry that produces oil, that produces and makes transportation fuels for aircraft, boats, cars and so on. That's going to be the case for the foreseeable future. If we need to get things done, we are going to need that energy.

The second thing is natural gas. Natural gas is a building block for economies across the globe, and LNG is a very important component of that. We can be a major participant in that and create thousands of jobs.

Third, we have petrochemicals. There are tens of billions of dollars of petrochemical facilities that can be built using the feedstock that Canada has. I think the U.S. has spent about $300 billion on developing petrochemical facilities. We need to be a part of that.

When we talk about the energy industry, it's the infrastructure that moves oil and gas to be processed in order to make the products we use to transport ourselves and to make the plastics that provide the ventilators, the masks and all of the infrastructure of medical facilities.

We have the opportunity here, and we do, and we are cognizant that we need to produce sustainable energy. The industry is committed to that. We need to form more of a partnership around realizing this potential and doing it in the best way we can.

I can't underestimate this. It is one of the key building blocks of the economy going forward. We have to survive, and the oil and gas industry is one of the keys to being able to come back and be strong, and to build and do all the things we want to do in the future. However, we need to survive and we need to get a quick start at this. We have the resources and the capability, and we have the record to do it.

[James Cumming, Conservative, Edmonton Centre, AB]

In your presentation you talked about the engagement and support from indigenous communities on energy projects. I know in the province that I come from, Alberta, there have been some really successful partnerships. I also think that's a big part of this recovery.

Can you elaborate a bit more on your message there?

[Chris Bloomer]

The message is that the pipeline industry has certainly been engaged with indigenous communities across the board. This is an immense linear infrastructure that's spread across the whole continent. We interact with communities across the board. We contract with those communities. We provide the ability to grow businesses in partnership.

The participation of indigenous communities is critically important. There's also the question of indigenous ownership. If we look at Fort McMurray and the Mikisew Cree, there's a great success story there. Those are models that need to be carried forward. There's a strong partnership that can....

The bottom line in all of this is that we need jobs. As I've heard across the board today, the number one thing we need is to get jobs and economic development going. We need to create jobs. That should be our number one focus going forward. That includes indigenous communities across the board in every capacity.

[James Cumming, Conservative, Edmonton Centre, AB]

You said there will be a market for these products for at least the mid-term. Would you say it's important to have additional access to markets?

One of the things I've proposed is a private member's bill to repeal certain restrictions on shipping off the west coast, which would allow access to a deepwater port and access to markets. Is that important to your members and important to those communities in an indirect and direct way?

[Chris Bloomer]

I think it is important to those communities in an indirect and direct way. The world is going to need the energy that we have for a long time to come. That does not discount, diminish nor in any way disparage the fact that we are evolving our energy portfolio over time. I think that's going to happen anyway.

As I said in my comments, we need to be the first Mcf of natural gas and the first barrel of oil that gets consumed, because we produce it in a sustainable way. That has to be our calling card. That has to be our leverage. We have the ability to do that.

[The Chair, Liberal, Wayne Easter]

We'll go to Mr. Fragiskatos, and then have a short question from Mr. Brunelle-Duceppe.

Peter.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much, Mr. Chair.

Thank you to the witnesses.

My questions will be for Mr. Dinsdale from the YMCA.

Mr. Dinsdale, thanks very much for your continued advocacy for the not-for-profit sector. We've heard from Imagine Canada and other not-for-profit advocates in the past few weeks.

I want to ask you about the Imagine Canada ask, as a matter of fact. The estimate that I'm running on, and it's the estimate that's been brought to this committee in the past, puts the value of the wage subsidy program and the commercial rent assistance program at over $4 billion for the not-for-profit and charity sectors. The sector, through Imagine Canada, has asked for $6 billion in support of a stabilization fund, as it has been put. I know this ask was significantly higher in the past, but we did hear recently that it has been reduced to $6 billion.

In your mind, what other costs would be captured by this? If it's not rent and wage support because of the existing programs that would help with that, what would a stabilization fund go towards? Over what time frame would you need this support?

[Peter Dinsdale]

We asked our YMCAs specifically about what they needed. Imagine Canada has its own economists and runs its numbers, which is why a subset of us, including the Boys and Girls Club and the United Way, talked about what national federations need in order to survive the pandemic.

We have about 30,000 staff. We laid off 20,000 staff at the start of the pandemic. With the wage subsidy, we've hired back about 40% of them. The reason the uptake has been slow is the attestation requirement. It makes our chief financial officers and finance people anxious about the numbers and the complexity of applying.

There's also the fact that there is still no revenue coming in. Our child care facilities for the most part are not open, and our fitness facilities and community centres are not open. We still have overhead: overhead of all those facilities, overhead of the rent. The rent control measures aren't meeting the needs the YMCAs have. They may be meeting other needs, but they aren't meeting the needs we have.

This is about the ability to have facilities coming out of the pandemic. There are still costs. Even when there's no revenue coming in, there are still costs to operate this infrastructure. That's what's not being addressed. That's what sector stabilization is needed for.

You asked about a time frame. We asked our YMCAs what this looks like and what they need. The three-month number was $42 million for the network of 1,700 locations, and the six-month number was double that. Now that there are no summer camps, that challenge is going to be even harder moving forward.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I know that the sector is very responsible with the way it allocates funds, but I know taxpayers would also have questions, naturally, as you would expect, about how to ensure value for money and how to ensure that proper checks and balances are put in place if a stabilization fund is to be supported by the federal government. Do you have any thoughts on that?

[Peter Dinsdale]

We could be fully accountable for any funds we receive. We'd continue to do that. In fact, I think one of the important questions that you didn't ask explicitly—maybe it's implied—is how we can ensure that funds of this nature aren't being spent just to prop up failing business models or organizations that don't—

[Peter Fragiskatos, Liberal, London North Centre, ON]

That was my next question but you anticipate well. Please follow that line of thinking, because I think it's an important point.

[Peter Dinsdale]

Yes, or community supports.... I'll give a real-life example.

Last year, we had a YMCA in western Canada—this is not about the pandemic, but it's an example—that was having problems with their operating model. We actually worked with the board to shut them down. We put our own CEO in there. They worked with the board. They sold the assets and they paid back debt. It had really important child care services in that community. We partnered with the neighbouring YMCA to take over the child care program and make sure those essential services weren't lost.

The issue in the pandemic will be that if we lose a facility because of cash flow issues, those services will be lost. You don't have time to put people in place, to liquidate assets slowly and to renegotiate contracts. They'll simply shut their doors and go bankrupt. That's exactly what we're trying to avoid. That's why something like sector stabilization is required.

We had about $16 million a month between child care fees and HFA fees—health, fitness and aquatic—coming in. That's essentially zero now, and all the overhead remains, so we're working hard to make sure we don't lose those facilities.

[Peter Fragiskatos, Liberal, London North Centre, ON]

You talked about child care, Peter. I wonder if you could speak to that and how day care closures have impacted your clients. I know that you spoke about child care in a different context, but obviously this is a critical issue right now in the crisis that is COVID-19.

[Peter Dinsdale]

We've been there for people who need to go to work—the essential care workers—and have been keeping Ys open in a really challenging business environment. It costs so much more to serve a third of the kids than it did. You have all the same overhead with the facilities and with the people coming in who continue to serve critical care workers.

As we grow this out, how do we make sure it's there so that people can go back to work more broadly? There will have to be different facilities set up in terms of how many people they have at a time and in terms of personal protective equipment. It's going to cost more money to get the workers in there, because there's more overhead. We have subsidized child care. You get so much and you can only pay your workers so much. With child care, I think, in order to grow it out and expand it in a post-pandemic time, it's going to require targeted investments.

I also know that some of the bilateral agreements with the provinces are up for renewal. I think one of the things that could be done to help stabilize that sector is to renew those now, in a multi-year way, so that we're sure we have long-term business planning in place.

[The Chair, Liberal, Wayne Easter]

We have to end it there.

We'll go to Mr. Brunelle-Duceppe, and we'll have to wrap it up with Peter. As always happens in a panel of seven, we will run out of time.

Alexis.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Thank you, Mr. Chair.

I'd like to thank all the witnesses for their presentations. I'd also like to thank the interpreters and technical support staff of the House. They're doing a really incredible job.

My question is for the National Association of Friendship Centres.

You said earlier that the COVID-19 crisis had had a very intense impact on your mission, but that several other crises would continue for the indigenous friendship centres.

Could you tell us a little bit about these various difficult situations that you have to deal with on a day-to-day basis, on the ground?

[Jocelyn Formsma]

If it's okay with Chris, I could give the overview. Our president is much closer to the ground and could provide that on-the-ground reality.

I wanted to chime in on the charitable sector in supporting what Peter Dinsdale from the YMCA has said. Friendship centres are also within that charitable non-profit sector. We also support the Imagine Canada call for the sector stabilization and certainly want to ensure that for indigenous not-for-profits, which border both the indigenous world and the non-profit world and have unique needs. We also see ourselves within that sector.

There are a few things on the scrutiny side. Certainly, from indigenous non-profits, we have huge scrutiny for the $375 million. We're getting questions every day, so I definitely look at that. I look at what the government and the municipalities are saving by propping up the sector and ensuring that we're covering off the most vulnerable. We're covering off the people who would otherwise have no place to go, which may drive up costs in other places.

We also have community trust and accountability, which are our anchor. If we didn't have the trust and accountability of our communities, we wouldn't have that same trust and accountability from our funders. The challenges I think are vast. Our president, who works with our friendship centres every single day, would be able to speak better to those on-the-ground realities.

[Christopher Sheppard-Buote]

Thanks, Jocelyn.

There are a couple of specific points I've made in other committees. I think my first committee was probably with Peter, when I was much younger.

In Saskatchewan, for example, our infrastructure deficit before COVID-19 was $57 million. What kind of economic driver could that be for 11 different communities in Saskatchewan, if that deficit were met just in its current reality? What could it look like if we planned those infrastructure measures to future-proof situations like this?

We already have friendship centres that are literally testing sites in northern Saskatchewan. If we actually purpose-built and purposely drove infrastructure investment on the ground, using networks that exist, whether it's the Y or friendship centres or whatever, it's automatic investment in, for our case, 97 communities across Canada. The majority already own their properties.

When it comes to the reality of what we deal with every day, I will quote a young person who responded to the youth survey we put out, who said, “As a former young person in care, it's extremely hard because I don't have a family to go home to. My foster parents can't take me, and I am currently stuck in a shelter for the remainder of this crisis.” That's just one small reality that we hear 97 times in 97 communities all over the country.

When we come here, we are not just talking about the economy; we're talking about how Canada is investing. We are seeing people die. It is not just about the future economy. It is literally about how we can help the economy but also keep people alive.